The new company Chemcel Pvt Ltd. will build and operate a processing facility near Colombo to manufacture bio-based superabsorbent polymers, commonly used in food packaging, personal-care products and various industrial applications.

ADM will be the majority owner of the venture and will market the plant's production of ADM's BioSAP -brand superabsorbents produced at the plant from starches obtained from agricultural feed stocks, ADM said in a release Friday.

Mr. B.R.L. Fernando, chairman, CIC Holdings PLC and Chemanex PLC has said that their companies have consistently looked at ways to add value to both domestic and imported agricultural products.

"This new joint venture offers us a technology platform that combines the research and development expertise of a major global agricultural processor with the available facilities and knowledge of CIC and Chemanex," Mr. Fernando was quoted.

CIC Holdings, which presently owns 30% of Chemcel, announced Friday in a stock market disclosure that it, in the capacity of a shareholder of Chemcel, had entered into an agreement with the Archer Daniels Midland Europe BV.

Under the agreement ADM Europe BV will invest US$ 14.245 million in Chemcel and new shares of Chemcel will be issued to the Netherland-based ADM subsidiary.

After the new share issue ADM Europe BV will become the major shareholder of Chemcel with 66% equity ownership and CIC Holdings will then own 10.2% of the equity.

Chemcel will utilize the funds from ADM to complete its Chemcel Production Plant situated at Meerigama Export Processing Zone.

Archer Daniels Midland Europe B.V. based in Rozenburg, the Netherlands operates as a subsidiary of ADM Worldwide Holdings LP. The company processes and supplies cocoa, chocolate and oilseeds.